Recently we came across the website, FXMAC. We were intrigued by the website and business model. FXMAC is an FSA regulated asset manager that compiles top performing Forex investment strategies and puts them on display for investors. Investors can then research the strategies history, overall performance, and if they find something they like they can register for a managed account. All client accounts are setup as separately managed accounts where the client’s funds are kept in their account and then through the use of Multi Account Management technology clients receive trades into their account. After poking around on their website for a bit we finally reached out to see if we could do an interview. The Partner Department Director, James got into contact with us and was gracious enough to do an interview.
*DrinkForex does not endorse FXMAC or Managed FX programs. The information below is only for educational purposes. Before making any investment decisions you should consider the risks and speak with a professional.
Drink Forex - What is FXMAC? Can you give us a background on you and your business partners?
FXMAC- FXMAC is an online managed account services company. If you look in Google for ‘Forex Managed Accounts’ we are the number one website worldwide.
Drink Forex - How long have you been operating this company?
FXMAC- FXMAC’s website is offering the services worldwide since 2012.
Drink Forex - Of course we have to ask, what is your drink of choice? Is there a reason you prefer that drink?
FXMAC- We drink coffee. It keeps us hard working and more awake.
Drink Forex - Can you explain what a Forex Managed Account is?
FXMAC- A Forex Managed Account is an account held at a broker that belongs only to the client. The client signs a LPOA (=Limited Power of Attorney) that legally allows the asset manager to open and close positions in the client’s account. The client then compensates the asset manager a fixed monthly fee that is determined by the performance of the account, usually 30-50% of the account performance. Performance fees are also based on a HWM (=high water mark).
Drink Forex - Why would someone want their account managed?
FXMAC-The main reason that any one should have a Managed Account with a very good Asset Manager group is due to the Forex Market has the potential to return significant profits, more so than most other markets, but also it is one of the more risky markets that exists. In our opinion it is better that a person allow a very steady and experienced professional to manage the accounts.
Drink Forex - What are some key criteria someone should look for when selecting a money manager?
FXMAC-The key criteria for selecting a money manager is:
1. First of all, make sure the results are verified by a third party independent company (such as Fxstat, Myfxbook, Fxblue, etc)
2. Second, the verified history has to be long enough (at least 1 year)
3. Third, the average monthly profit has to be similar or lower than the DD (= Draw Down).
4. Fourth, The maximum DD should be under 20% (and similar to the average monthly profit)
5. Fifth, the last 4-6 months has to show a steady tendency (avoid choosing strategies that the last 4 months aren’t performing as steady as the other months)
6. Sixth, the money manager has to assure that they fix a Hard Stop loss (The client shouldn’t accept more than 30% of this Hard Stop loss).
Drink Forex - What are some potential risks investors should be aware of when having their money managed?
FXMAC-As mentioned before, you should always get a third party verified track record. Never accept PDFs or similar. Also look for historical data of no less than 1 year. The reason is that 99% of the Asset Managers that have good results want to show the results in a third party verification company such as Myfxbook or FXstat. 99% of the Asset Managers that only show a PDF or a statement are trying to hide something. Investors should also not consider data that does not have a 1 year history because the DD (=DrawDown) can be low in the first few months, but after several months the account would have gone through enough unique market conditions to see how it truly performs. Then in this case the DD could be large. If the data is only for 1-3 months it could be that the Asset Manager was lucky.
Drink Forex - How important would you say being with a regulated Forex broker is? Are all of your managed accounts setup with regulated brokers?
FXMAC-Regulated brokers are very important mostly in the case of a bankruptcy. It is important not only to be regulated but also that the broker has client funds held in segregated accounts.
Drink Forex - When selecting a money manager to work with what are some of the criteria you look for?
FXMAC-We look for some reference in our sector of the manager first, if possible. Then we give the manager an application test in order to evaluate their background, their risk control, etc.
Drink Forex - You list MyFXBook and FXStat on your website, can you explain what these services are and the importance of them?
FXMAC-They are important because they are an independent third party source. Some of our Asset Managers like FXSTAT more and some prefer MYFXBOOK. We don’t care which one, but it’s essential that all our clients see the real results verified by a third party independent company before making the decision to invest in our systems.
Drink Forex - How frequently do you check the activity of your money managers? Are you quick to remove a money manager if they are experiencing a draw-down?
FXMAC-We control all our MAMs daily. We already have taken away several systems due their DD has changed to much more than their historical DD. Thank God that all our Asset Managers are quite conservative and in the worst historical scenario the DD has still been conservative. We are able to identify a poor performing strategy quickly because we look for a balance among the average monthly profit and the maximum DD, then, in case the DD gets to around double the average monthly profit we inform the clients that the system is no longer being offered and they have 2 options:
Drink Forex - What does your typical investor look like? Size of deposit, location, etc?
FXMAC-Most of our clients are retail clients. Our retail clients profile aren’t kamikaze clients that are looking to get rich in a short period of time with little capital. Those kind of clients aren’t attracted to our managed accounts due to the fact that 100% of our systems get an average monthly profit of among 5% and 15%. Kamikaze clients typically look for a larger return. So, our clients accept this average monthly profit (with a low DD) and understand that they won’t get rich with by investing small amounts of capital. But, they can get a good annual result if they keep the funds invested in our steady moderate profitable strategies. In other words, our regular client looks for a correct monthly profit with a balanced DD (similar or lower than the average monthly profit, which most of our strategy meet these expectations).
Drink Forex - Thank you again for agreeing to speak with us and provide insightful information to our viewers. Is there anything you would like to say before we let you go?
FXMAC-Yes. First of all thank you for your interest in our company. Second we would like to highlight that we don’t pretend to be the best forex managed accounts company. But we do believe we offer a great selection of steady and profitable strategies, and have an excellent service to retail clients, as well as large investors. We have shown through the years that big investors can trust us and we have premium services for them.